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Who or What Department Prepares and Processes your payroll?

02 02 17, 14:55

I used to be employed with a large international pharmaceutical company where payroll computation and processing is done by the HR department. This practice ensures confidentiality in payroll/salary as information about compensation/benefits is limited to a few people in the HR department. With the reporting requirements of our tax regulatory body, however, the task of summarizing monthly and annual payroll information per compensation type has become more tedious. In the company I am currently connected with, the HR prepares the payroll sheet but it goes to me for checking before it's passed to the executives for approval. To be honest about it, there was never a payroll computation or tax reporting that was at least 90% accurate. The HR people can only reason out that they were not trained to handle tax reporting or payroll preparation in school.

In the furniture company I was with, it's the Accounting department that prepares the payroll computation, the mandatory remittances, and the tax reporting part. In the large construction group I've been with, the payroll and reporting is outsourced to a large auditing firm.

Can you share what's the common practice in your country or company and what do you think is the better practice?

In our company earlier it was the responsibility of HR people to take care of payroll management. But nowadays we use ORACLE based payroll system which is handled by Finance and Accounts department. They do the end-to-end processing and there is no confusion at all. Employee attendance is also being captured automatically through biometric attendance system.

But the bad effect was that HR and Admin manpower was cut down to less than half of its strength. There is nobody required for time management, attendance recording and everything will be taken care by machines. A lot of people lost jobs due to automation and outsourcing in our company.

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Our payroll is handled by Finance. Hr handled hiring firing, raises etc, and tell Finance about it, but the actual process of sendinf out the payroll is entire inside Finance. This is partly because we pay by bank transfer so we have to make sure those employee details are kept confidential, and Finance is more secure than HR. Giving HR the ability to perform bank transfers just leads to another security risk and somewhere else we'd need to track in case of a breach.

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The finance department is always responsible for the payroll. However, the human resources sector does a survey of the employees active in the company (making the list always up-to-date). This control is essential so that no undue payment takes place and the company remains aware of the number of employees it is hiring to date.

The dynamics between the human resources and finance departmen work perfectly. So, I'll keep doing like this.

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Things sure have changed over the years, and even a couple of years ago it seems like most companies did their payroll internally, but these days it is almost always contracted out, at least that is the way it is here.

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In all the companies I had worked for, it is the Payroll section of the HR department that processes the payroll. The auditing is handled by the Auditing department and the distribution is handled by the Payroll section. There is also a senior officer that signals the approval before the distribution, more often a vice president. But with the popularity of the ATM bank accounts, the distribution is now forwarded to the bank which credits the money to the ATM accounts of the employees.

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In all the companies I had worked for, it is the Payroll section of the HR department that processes the payroll. The auditing is handled by the Auditing department and the distribution is handled by the Payroll section. There is also a senior officer that signals the approval before the distribution, more often a vice president. But with the popularity of the ATM bank accounts, the distribution is now forwarded to the bank which credits the money to the ATM accounts of the employees.

Sounds like a god way to handle it........

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Most big companies here have their payroll go directly to the ATM account of their employees. The preparation of our payroll is handled by a section in the HR department where the manager does the checking and approving for the rank and file. But for the payroll of the officers, a senior vice president does the task of checking and approving for purposes of confidentiality. That senior vice president is already of retirement age but she is being requested to stay longer until the bank finds a replacement.

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From my experience so far with working in several business establishments so far, the size of the company determines the number of departments that would be set up to handle different tasks towards the day to day running of the company's business activities.

Some companies have their payroll handled by the finance department or human resource department, audit department and so on. So, it literally depends on what a particular company decides to work with. Where I'm working at the moment, it's the human resource department that takes care of the payroll.

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I have had the privilege of working in few companies over the years and in all my years working in different places, it's been only the HR Department that is charged with the responsibility of handling the payments of workers. It's not just payments of workers that is the only job of HR Department, it's also charged with helping to ensure good working conditions and relationships between the workers and the business owners. They do take care of new recruitment of workers and getting them oiled with the company's objectives.

But when it comes to the payroll management, it's their top priority to get all processed and done as and at when due. There is no worker anywhere in the world that appreciates or fancy their payments being delayed, so the payroll preparation is really a serious part of work for the HR Department.